Research by independent letting and sales agent Benham and Reeves has looked at the unfortunate cost of landing a bad tenant and how much this can reach during the grueling process of having them evicted from the property.
Previous research by Benham and Reeves highlighted the increasing number of fraudulent lettings applications by rogue tenants, who no longer need pay if their application is denied due to the introduction of the Tenant Fee Act 2019. Benham and Reeves found that the number of false applications being detected by their team had already increased by 117% so far this year when compared to 2018 and the number of false passports being used had also increased notably.
This latest research looks at the detrimental financial impact a rogue tenant can have on a landlord’s buy-to-let investment based on lost rent, the cost of refitting a kitchen and bathroom, redecorating and replacing the windows, the potential legal fees, as well as the additional cost of mortgage payments out of their own pocket while no rent is coming in.
According to Benham and Reeves, a rogue tenant takes roughly nine months in total to evict from the moment they enter the property to legally removing them. On average across the UK, that’s £6,111 of rent down the drain.
But it goes far beyond the rental costs and the vast majority of the time the apartment requires a complete renovation as rogue tenants often make off with everything they can or leave what they can’t take in a state of no repair. The two rooms that always see the most damage are the bathroom and kitchen and when you add the average cost of a new kitchen (£8,000), the average cost of refitting a bathroom (£4,875), the cost of redecorating (£2,900), new windows (£7,000), as well as the average legal fees of £3,000 required during the eviction process, and you’re looking at a hefty bill of £31,886.
However, in London where property costs are much higher, this total cost climbs to £41,318 and in prime central London, thought to be the capital’s biggest hotspot for rogue tenants, costs can run to over £50,000.
Kensington and Chelsea is the most expensive area in the UK to rent or buy and having to deal with a rogue tenant for nine months will set you back £54,647. In Westminster, the cost hits £51,263 with Camden, the City of London, Hammersmith and Fulham, Richmond, Islington, Hackney, Wandsworth, Tower Hamlets, Lambeth and Southwark all seeing the cost exceed £40,000.
Outside of London, landlords in Oxford and Cambridge are also facing a cost of more than £36,000 to evict a rogue tenant, In Bristol, Edinburgh, Bournemouth, Glasgow, Manchester and Portsmouth landlords are still facing a bill upward of £33,000, with landlords in every other major city looking at a minimum cost of £30,000 or more.
Director of Benham and Reeves, Marc von Grundherr, commented:
“Rogue tenants are a landlord’s absolute worst nightmare and apart from the stress and time consumed dealing with them, the financial impact can be crippling.
We’re not talking about a bad apple that doesn’t pay rent for the last two months of a tenancy and leaves a dirty protest on their way out. We’re talking about serious criminal organisations that know the letter of the law and every trick in the book to prevent you from getting rid of them, including how to stall the court date for weeks on end and how to deter the bailiff through threats of violence when they finally do call.
At the very least, you’ll have a dangerously overcrowded sub-let on your hands but more often than not it will be a brothel, workhouse or drug farm. We’re not kidding when we talk about the complete renovation and refurbishment of the property afterward either, as they will take every single thing they can and destroy whatever is left.
Kitchens, bathrooms, and windows are often the main features targeted as they know that these are the most costly areas of a property to replace and more often than not they will smash appliances to pieces, disconnect pipping and shatter windows for no other reason than to cause the maximum amount of damage they can.
It’s an extremely deep-rooted issue that goes beyond the tenant, even as far as the bribery of the concierge and so you really are fighting from day one to get them out.
That’s why we can’t stress enough how vital it is to rent via an agent who conducts the proper checks through a qualified third party who is trained to spot even the most convincing of forged documents. Failing to do so can cost you thousands, even hundreds of thousands to put right.”
Marc has been a board director since 2001 and oversees the company’s rental operations as well as developing new business. He is instrumental in the company’s expansion and works closely with Managing Director Anita Mehra to develop its core services.
Read more about Marc von Grundherr here - Read full profile